Cutting the Cord Part 1: The Assessment

Running the Numbers on Cord Cutting

To put it simply, Cable and Satellite television subscription costs can really put a hurting on your bank account. The cable/satellite model offers subscribers access to hundreds of channels, many of which you may never watch, but there’s still a need to subsidize all that content. Since cable and satellite companies pay ‘per subscriber affiliate fee’ for each and every channel, individuals that only watch a handful of channels are still paying big bills to help cover the cost of the hundreds of channels that are being offered. Nowadays, even a basic, no frills television subscription package can run over $50 and a study by the NPD Group back in April showed the average monthly pay TV rate in 2011 was $86/month. Subscription fees aren’t stagnant either and are expected to rise 6% a year, reaching an average of $123 by 2015 and a whopping $196 by 2020.

Someday perhaps we’ll actually arrive at a point where consumers are able to pick channels ‘a la carte’ and only pay for the channels they actually want to watch. The technology to make such a thing a reality is already here, but the current cable/satellite companies are fighting it every step of the way, not wanting to lose their cash cow. At some point it’s inevitable that we will come to some sort of ‘a la carte’ option, but my gut tells me that whoever is providing the new service will find a way to make it cost as much as we are paying now even though we’ll be losing access to all those extra channels.

How much money you can save will depend on many factors, but I can say with almost certainty that if you cut the cord, you will save money. Simply pull out your most recent cable/satellite TV statement and look at what you’re paying for television and think of what else you could do with that money every month. There is one down side to cutting the cord though. Most providers offer ‘bundles’ of services that you pay less per service (TV, Internet, Phone) if you have more than one. If you do drop your television service, there is a chance your bill for those other services may go up a bit. For example, if you have some sort of ‘Triple Play Package’ including television, internet and phone for $180/month, it’s likely that dropping television will not knock one third ($60) right off the bill, you may see your new bundle for Internet and Phone cost more than $120. You are still going to save money, but you’ll want to call your cable/satellite provider to see what your bill will actually drop to if you do pull out television service.

My experience: You’d be amazed at how shocked your provider will be when you tell them you want to drop television service. Their first question will be, “Can I ask who you will be moving to?” When you tell them “No one, we are getting an antenna.” you’ll hear silence for 30 seconds while representative tries to figure out what to say since there’s no option for that on their script. In my case, the woman asked me three times to explain what I was doing because she couldn’t even comprehend someone living without cable or satellite television.

Another thing to factor into the equation is what speed your Internet service is, and if you might need to pay more to step up to get more bandwidth. Dropping television means you’re probably going to start streaming some content off the Internet from services like Hulu or Netflix. For most video streaming servicses you’re going to need a connection with at least 1.5 Mbps download speeds, but honestly I wouldn’t go below 5 Mbps if you’re hoping to stream HD content. Additionally, if you think there might be a chance you’ll be streaming content from one of those services to more than one HTPC or device at a time, you’ll likely want even more bandwidth.

[Author Edit: We got a quick tweet from @danielEwest that brings up a great point. If you are unfortunate enough to be stuck with a bandwidth cap, you really need to factor that into the equation as well. Looking at Netflix streaming for example, you can use up to 1 GB of bandwidth per hour on 'best quality' and that jumps up to 2.3 GB if that's HD streaming. Make sure you factor that into your numbers as it certainly wouldn't be cost effective to drop a $75 Cable/Satellite subscription only to be hit with a $100 bandwidth overage fee.]

That about wraps it up for our assessment and pre-work to determine if ‘Cutting the Cord’ is right for you. While we all want to save money, it could very well be that dropping pay television won’t work for you, but that doesn’t mean you shouldn’t revisit it at a later date. If you have come to realization that you are willing to take the plunge, and save a few dollars along the way, we’ll begin building our own Home Theater PC (HTPC) using Windows 7 in our next installment, Cutting the Cord Part 2: Building your HTPC - The Hardware.

Missed any installments of our Cutting the Cord Series? Catch up on them here:

My Experience: I haven't had cable for over a decade or longer if I really think about it. I am probably not the norm but once I was without it for long enough, I didn't miss it a bit. the only thing I have now is Netflix, Amazon Prime streaming (great added value to Prime which I am going to have anyway), and my server with all of my movies. I couldn't imagine going back to $150 monthly bills for so called entertainment when everything I need comes over my $65 a month 27/5 fiber internet connection and Netflix for $17.47 (streaming plus one dvd at a time). And when there isn't anything I really am in the mood for on those, I go outside. Crazy, I know.

We cut the cord 2-1/2 years ago and have saved $2500. I put 2 antennas in our attic (1 pointed towards Boston which is about 45 miles south of us and 1 pointed 45 miles NW toward Manchester, NH mainly for local news/weather). We get about 25 channels. Now we have 3 TVs with HTPCs connected (main HTPC in living room connected to plasma, 2 mini-HTPCs on the HDTVs in the 2 bedrooms for streaming over the home network) and my wife and I have tuner cards in our desktops. Between OTA, downloaded content on our NAS, PlayOn (and some scripts purchased to use with it) we can watch just about anything EXCEPT sports not on OTA. If you are a sports junkie, OTA is not for you. We have an Amazon Prime account as well.

Also the signal gathering capabilities of tuners whether in your TV, tuner card, digital converter box can vary. Each of our 3 TVs (Samsung, Toshiba, Viore) will get 1 or 2 stations that the other TVs don't get or as strong.

All 3 of our HTPCs use AMD APU based systems- an A10-5700 in the living room, A6-3500 in our bedroom and an A4-3400 in the spare bedroom. All have 8Gb ram/64Gb SSDs/Win7x64.A10 system has a Blu-Ray drive in it.

I was wondering what type of antennas did you put into your attic? I am in a similar location as you are. Roughly 50 miles to Boston and 26 miles to Manchester, NH.

I am thinking of cutting the cord and am in the beginning stages of planing this out. Making an HTPC (or buying one) and using it with our two tv's. We have an AppleTV and Roku and also use Amazon Prime.

Cable television is basically paying them to shove ads down our throats. I love using Netflix and youtube. (I also spend some of the spare time playing all of the Steam games residing on my hard drive.)

I've never hand any problems with gaming on DSL, you don't need massive bandwidth to game. 6Mb (roughly 640KB down and 128KB up real world on my connection) is plenty, The Ping is the critical part. Depending on server location/game I average 40ms. Which is solid.

BUT as to the multi-people usage, yes DSL would blow if you had to share, I live alone so it's not a problem.

You can also watch episodes from the channel's own website, such as adultswim.com and comedy central.

Who needs proprietary networks when the Internet can provide all sorts of entertainment. It is getting to the point where computer illiterates can easily access TV media over the Internet and that's bad for Cable

Hehe, it looks like you guys took the advice I had quite awhile back and did an article on dropping cable/satellite. I "cut the cord" back in April of 2011, but I recently signed back up with Directv. Why you ask? They had a deal I couldn't refuse. My bill is only about $10 a month higher than what I was paying just for Tivo standalone service. In 2 years though I'm sure they'll raise my prices again and that's when I'll once again be dropping them.

Yep, I cut the cord almost fifteen years ago. I didn't grow up watching cable and only had it for a couple of years, as an adult. I wasn't impressed. Yes, some of the best television that has ever existed is on these days, but it's not worth $200/mo for it.

So, after a couple of years, I dropped it. Netflix and torrents make up for most of it. I don't use Hulu, because I'm not going to pay $10/mo for a crappy selection of crappy shows from a few crappy networks (and not even get the full archive of the shows!) and then be slammed with as many ads as I'd get from live television, at the same time.

I spend $8/mo for Netflix, $5/mo for MOG (for my music), $115/mo for my 22mbps/10mbps internet connection (business account, so no 250gb limitations -- I tend to do 1-2tb of data a month, easily). Between Netflix and podcasts, I don't really even have time for any other entertainment.

I've been thinking about cutting the cord but the options in Canada are not as great as in the USA. Canadian Netflix is nowhere near as good as the USA offering, Hulu isn't available etc. I don't even think you can get OTA HD unless you are near the USA border. If you are into sports then you need to see what the streaming offerings are (which are better for NFL in Canada than in USA). The more casual shows like the HGTV and Food ones don't seem available anywhere, so it looks like I'm stuck with cable. I use enough bandwidth without cutting cable, I'd need a super expensive internet package if I did (glad to see that added on as a point at the end). It's just not worth it for me so I've got basic cable and just added all the HD channels to make it as cheap as I can. I'm sure I'll revisit the decision annually. We watch a lot of TV, so I can justify the expense. If there were better options AND our TV consumption dropped, I'd likely be cutting the cord.

klatch, I just recently cut the cord this month and so far couldn't be happier. I live in Whitby, ON (Canada) and can pick up Fox, CBS, ABC (?), The CW, CityTV, CTV, TVO, Global, occasionally ION, and a slew of others - this is without a pre-amp.

Our bill was approaching $170/mo for Rogers VIP + movies with one PVR. That's over $2000 for what I estimate to be about 6 hrs of TV/week...and I recently received notice that prices were going up a few dollars for each package. This got me thinking. I personally don't watch a lot of TV and the shows that my wife and I watch to chill out (Elementary, Nikita, Supernatural, Vampire Diaries, etc) are all available in HD OTA. My wife can also get Glee, X Factor, etc so that's covered too. I'm not into sports as I'm more into doing than watching (road cycling addict.)

There are a few shows that we're losing like Dexter and The Walking Dead, but the latter is available directly from AMCTV.com, iTunes (ugh - too expensive), or torrent.

As for Netflix, if you have a Canadian account, you can use a service like Unblock-us.com to access Netflix US content! Unblock-us.com is $4.99/mo CDN and simply requires you to point to their DNS servers which, I assume, send your requests to one or more proxy servers in the US. No need for VPN and the associated overhead (and cost.) Unblock-us also gives you access to free Hulu content (The Simpsons, etc.)

So yeah, the overall experience isn't as completely integrated and smooth as cable, but saving $2000/yr - ~$144/yr for Netflix/Unblock-Us seems worth it to me, especially if you aren't glued to the TV more than an hour or two a day.

I built a PVR for $600 (core components), though spent another $500 on an additional Hauppauge 2250 ATSC tuner + 2nd SSD for recorded content (240gb, we delete TV content immediately after watching.) This HTPC also runs VMWare WS9 and hosts the domain controller and TFS servers for my work lab environment. The PVR cost will pay for itself in a year.

I'm sorry but did you miss the part where I said I also use it for VMs? :)

SSDs are also silent while most fast mechanical drives, capable of recording 4 shows at the same time, are not. Plus mechanical drives suck more power, generate more heat, and take up more space. If I want to store television shows, I'll use my 1TB NAS drive (QNAP TS-239Pro) and schedule a time to copy them...or setup up a iSCSI target and write over the 1Gbps LAN connection I've dedicated for VM traffic; my NAS drive has two ethernet ports, one of which is setup on separate network.

I cut the cord 3 1/2 years ago. I've use OTA TV, internet streaming, and DVDs. Let's face it, the only content you can't get (legally) either OTA, over the internet, or on packaged media (DVD or Blue Ray)is ESPN and the regional sports networks. I really can't see that being worth the money for pay-TV.

Cord-cutter here in Toronto. About 20+ channels. Don't use Netflix and really don't feel like I'm missing out on anything.

Another great resource for cord-cutters looking to go the antenna route is Digitalhome. Don't be scared by the .ca, lots of Americans on there and great sub-forums for specific regions of North America:

After installing XBMC, getting it setup, and configuring my remote I will never go back to cable. not only is it cheaper, but I get more content and have the ability to share it throughout my home. Plus I can stream Huli, Netflix, MLB, Pandora and other great stuff.